Fujairah heavy residue stocks drop for first time in three weeks

FUJAIRAH, Fujairah’s stockpiles of heavy distillates and residues declined for the first time in three weeks on signs of additional demand amid higher prices at competing ports, according to data from the Fujairah Oil Industry Zone released Wednesday.

Heavy distillate and residue stocks fell 13 percent week on week to 9.333 million barrels as of 19th August, the lowest since 29th July, the data showed. The drop contributed to a six percent decline in all oil product inventories at Fujairah to 19.898 million barrels — a two-week low.

The price of 380 CST delivered bunker fuel in Singapore was assessed at US$10/mt higher than Fujairah as of Tuesday. Other Asian ports, such as Shanghai, Hong Kong and Busan have recently seen premiums of more than $100/mt over Singapore, according to S&P Global Platts.

Supply tightness of bunker fuel in east Asia should begin to attract some supply from other regions, including the Middle East, Alexander Yap, an analyst at Platts Analytics in Singapore, said.

A large parcel of fuel oil was slated to be exported from Fujairah as Arc Energy had fixed a Suezmax tanker, SKS Skeena, to load 130,000 mt of fuel oil in mid-August for a Fujairah-Singapore voyage, Platts earlier reported. The tanker set sail 20th August and was recently in the Gulf of Oman, cFlow, Platts trade flow software, showed.

Heavy residue products include fuel oils used for marine bunkers and power generation.

Gasoline and other light distillates inventories rose eight percent over the week to 8.299 million barrels, the most since 17th June, while middle distillates slumped 21 percent to 2.266 million barrels after rising 35 percent the week before.

The middle distillates category include gasoil, diesel, marine gasoil, jet fuel and kerosene. Light distillates covered in the report are gasoline, naphtha and condensates that are stored in white product tanks and have an API of 45 degrees and above.

All commercial terminal operators in Fujairah participate in the weekly stock reporting at the request of FOIZ, the Middle East’s largest commercial storage facility for refined products. A total of 11 terminals participate, including storage volumes involved in activities such as blending and refining.

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